In celebration of the 50th Anniversary of the Cost of Living Index, C2ER is looking for pictures of “Contributors on the Road.” While out collecting prices in their communities, C2ER encourages participants to take pictures and share them on Facebook and Twitter using the hashtag, #50yrsCostofLivingIndex and tag C2ER. The organization who shares the picture with the most likes and shares will win a free online COLI calculator widget to embed on your organizations site for one year and a gift card to the individual participant. Please note that any pictures shared may be used in C2ER and COLI marketing materials and must be posted from the beginning of the data collection period through April 30th.

Additionally, if your organization contributed to the Index historically and has any old pictures or mementos that may help us mark the milestone, we’d love to hear from you!

For questions or comments, please contact Jennie Allison at jallison@crec.net.

C2ER is happy to welcome guest writer, Tony Gilbert with The REALFX Group

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The world of modern real estate marketing is infinitely more targeted, personalized and sophisticated than it used to be, due largely to the ability to obtain and analyze data. Big data, easily collected in the digital world, has opened myriad possibilities and streamlined efforts across the real estate sales and marketing universe to make them more effective.

LMI System & Program Support

In partnership with C2ER, launched the State Certifications and Licenses Data Tables to provide a state by state perspective on certifications and licenses.

Convened the 2017 LMI Institute Annual Forum in Denver, Colorado.

In partnership with CREC, engaged in the State Data Sharing (SDS) Initiative, to provide technical assistance to five states looking to shape data sharing processes for better policy and program evaluation.

Engaged LMI Institute state and affiliate members to address system needs.

Provided management and training support for the Projections Managing Partnership.

Supported the WIAC by providing background information to the Council and serving as a subject matter expert for the committee on data sharing, governance, and funding for the workforce information system.

During the past 12 months, the Council for Community and Economic Research, YOUR professional membership organization, has been hard at work increasing the visibility of economic, workforce, and community research by advocating for higher quality data, promoting more focused public and private investments in local data, and continuing to strengthen C2ER products and services. We keep you informed about new data sources, exciting research, and opportunities to learn. Following are some of the most vital accomplishments during the past year.

Data Collection and Research Activities

Improved the process of library application and added three non-COLI databases including the State Business Incentives Database, State Economic Development Program Expenditures Database, and C2ER Diversity Index Database

C2ER and the LMI Institute are pleased to welcome this guest post from Lokesh Dani, a current graduate student at George Mason University in Arlington, VA.

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Amazon is looking for a second headquarters—HQ2. Many major metropolitan areas are preparing proposals now to host HQ2. Amazon’s decision will be a pragmatic one of matching its needs and preferences with the metropolitan area’s labor force, its infrastructure, its culture, and the attractiveness of the incentives the city offers. Most cities will accordingly seek to highlight their highly educated STEM workforce, their university system, their subways, highways, and airports, as well as their quality-of-life, and their culture of entrepreneurialism. Yet, the question of how well matched these features of an economy are to Amazon’s business activity, rather than any average technology-oriented company requires a more nuanced discussion.

Here I present three data-driven reasons why the Washington, D.C. metropolitan region is uniquely well matched to the needs of an Amazon headquarters based on the metro’s unique and specific occupation and industry mix.

Meeting Amazon’s Specific Jobs Demand

An analysis of 5,948 job postings at Amazon Seattle’s headquarters since 2010 reveals that 42 percent of their job-demand was concentrated in software development activities. This was followed by 20 percent concentrating in management-related activities mostly covering project, program, and product management categories, including managerial activities relating to logistics and operations. The third largest concentration of demand was for engineering and R&D related work at 12 percent, followed by business development at 10 percent. The remainder of their jobs demand sought to staff their human resource needs, push their design innovations, and support their everyday activities, including addressing the regulatory and legal environment.

If the functions of HQ2 will mirror those of the Seattle headquarters then, for HQ2, Amazon will seek metropolitan areas that have a similar occupational mix as their expected demand. However, a common issue in matching demand with the regional supply of workers is that job categories, like workers’ skills and abilities, are amorphous and ever-evolving. This is visible in the plethora of job titles associated with related and similar types of work activities, such as the job titles of Programmer, Java Developer, and Software Developer. To get around this problem, I matched Amazon’s Seattle job postings to related occupational clusters in the Washington metro region and assessed the relative concentration of workers employed in these similar clusters.

The results show that for similar jobs as employed at Amazon’s Seattle headquarters, the Washington metro region has 2.2 times the national concentration of workers in software development; 2.9 times the national concentration employed in similar managerial activities; 3.8 times the concentration of related engineering and R&D workers; and, 2.3 times the number of business development workers as compared to the national average. This analysis reveals not just that the Washington metro area has a high concentration of educated workers with STEM degrees, but that the region has competitive advantages in precisely the type of educated STEM workers that Amazon needs to staff its new headquarters.

2. The Washington Metro Area’s Unique Industry Mix

To say that Amazon is a leader in cross-sector innovation would surprise no one. The technology giant may file under the NAICS code 454: “Nonstore retailers”, but the company’s business activities span well beyond the confines of any single NAICS sector, at any level of aggregation. To maintain its innovative lead and to satiate its demand for workers with breadth of knowledge and experience, Amazon hires from a diverse list of industries. It would then be useful to know what cluster of industries’ labor pool Amazon would most benefit from if it were to locate in the Washington metro area.

To investigate this regional characteristic, I have clustered all 3-digit NAICS industries in the Washington metro area based on the skill and task similarities of their most prominent occupations. This method reveals a ‘similarity’ of industries based on their potential for sharing occupational labor flows. What it shows is that nationally “Nonstore retailers” share an occupational similarity almost exclusively with other “Retail Trade activities”. In the Washington metro area this industry potentially shares labor flows with, “Professional, scientific, and technical services”; “Finance and Insurance”; and, the “Information services industries”. Compared with the composition of job postings of Amazon’s Seattle headquarters, the Washington metro area’s unique mix is well matched to keep the company at the frontier of innovation by attracting new workers with a wide set of diverse but related industry knowledge.

3. Regulating the Risks of Automation

Last year Mckinsey issued a report that assessed which jobs are most at risk of automation in the near future.[1] By evaluating work activities rather than job titles they reported that data collection, data processing and work requiring predictable physical tasks are the most susceptible to automation. Given Amazon’s primary industry activity in the retail sector, its data intensive technology, and its dominant market share, it is more-than-likely that the same technical advantage of automation that favored Amazon in disrupting an industry will ultimately present the company with substantial workforce challenges in the future. The only long-term option to automation is workforce retraining and upskilling in conjunction with an update of the regulatory infrastructure to support a digitized workforce. As the seat of the federal government and with one of the nation’s best education ecosystems, this is yet another competitive advantage of the Washington metro area that specifically benefits Amazon’s future growth and headquarters.

Conclusion

Having an Amazon headquarters locate in your city is a profitable opportunity. As Amazon notes in their RFP, “every dollar invested by Amazon in Seattle generates an additional $1.40 for the city’s economy overall.” The RFP further mentions that Amazon’s presence in Seattle has brought large positive innovation spillovers boosting the metro’s engineering and R&D capabilities. For a metro such as Washington, D.C. that has for some time sought to diversify its private sector away from federal dependence and re-brand itself an innovation hub, landing Amazon’s second headquarters would be a big win. Yet, the decision needs to also favor Amazon in a fashion that meets its current needs but also maintains its position at the frontier of innovation. The assessment summarized here provides support for such an argument by showing that the Washington metro area’s occupation mix and its industry mix provide unique opportunities well suited for the needs of an Amazon headquarters.

Government provided data plays an integral role in decision-making within businesses and government. It is important that the data be obtained and reviewed with a high level of rigor to maintain its integrity. A large quantity of data comes directly from the Federal government thanks in part to agencies such as the Bureau of Labor Statistics (BLS), the Bureau of Economic Analysis (BEA), and most prominently, the Census Bureau. These agencies are all in line to endure cuts from the Trump Administration’s budget.
Supporters of the Census Bureau have raised concerns that the agency isn’t receiving the funds necessary to adequately perform the decennial Census. Government collected data has long been considered the “Gold Standard” of data resources, and for good reason; these agencies are fiercely dedicated to providing accurate, unbiased statistics. Our country depends on these statistics as a kind of lubricant for our economy; the better the information, the more efficient its operation.

We use the Census to determine how our local constituencies are represented. The BEA produces statistics that measure U.S. economic performance, like GDP. The BLS tracks our national unemployment rate, and the demographic statistics that compose the greater national reporting. Cutting funding for these programs could have negative repercussion to our economy and society.

The impact the Administration’s proposed budget has on the Census is particularly concerning. Compared to years past, the proposed funding ramp-up to the decennial Census is far behind, especially considering the new method the Census is interested in testing. The primary function of the Census is to make record of every person residing in our nation, and the Bureau is working to find better ways to execute the most accurate count possible. The Bureau understands that even a successful Census count, like the one 2010, comes with errors, and they are seeking out ways to improve their processes.

Citizens that change residences frequently can be missed, and those with more than one home are sometimes counted multiple times, or do not respond to the standard data collecting methods at all. This has a direct impact on political apportionment, and we should be encouraging the Census to develop new, modern techniques, not battling for funding that barely allows the Bureau to keep valuable programs like the American Community Survey (ACS) afloat. Using new methods to perform such a daunting task undoubtedly comes with uncertainty, but the Bureau of the Census estimate that investing in updates could save over $5 billion when compared to their traditional data collecting methods.

The BLS and BEA both serve to provide policy and business leaders with essential macroeconomic indicators. Monthly unemployment and national GDP statistics are developed by these agencies respectively. Those two statistical programs alone are immensely powerful, and important decisions, including the allocation of government funding and business development resources, are made with this information in mind.

These two programs aside, the Administration’s budget request explicitly states of the BLS that the Bureau “may need to delay or defer spending on…certain data improvement…and research projects…”, a statement that goes without saying considering the FY18 budget request doesn’t even allow the BLS to cover needed budget adjustments resulting from inflation. The National Economic Accounts, which produces the crown jewel of the BEA, annual GDP, faces a sharp 12% reduction in funding which will require the BEA to do away with developing new programs, like the International Trade in Services initiative, completely. In their Congressional budget estimate write-up, the Department of Commerce reports that, “Without these new data, U.S. businesses, trade negotiators, state and local planners, and other policy-makers will lack critical data to guide future economic decisions.”

Quality government provided statistics are an imperative that transcends the political spectrum; Democrats and Republicans alike can understand the important role that the government has in providing accurate data for the Congress. Members of the House and Senate need to know who they are representing if it is incumbent upon them to advocate for their needs. Further, good statistics are needed by both the private and public sectors. Free markets are more productive and efficient when business decisions are informed with reliable data. Good work from the Federal Statistical Agencies raises all the boats in the harbor. This part of our government is too connected to economic activities that result in jobs and wages to not receive the support it needs. The implications of the work done by agencies like the Census Bureau should be considered paramount to the government’s effort in promoting prosperity.

The Census Bureau requires upwards of $1.8B in FY2018 to perform the preparations necessary to conduct a full decennial Census. This upfront investment will ultimately save money and improve the quality of the data. BLS and BEA also have been facing cuts to vital programs due to a lack of funding and staffing and need your support. Contact your representatives to let them know you want them to support Federal data programs. The Census Project, C2ER, LMI Institute, and APDU will keep you up to date as the budget develops.

You don’t need a bay or a bridge to foster economic development within the technology industry. What you do need are innovative entrepreneurs, savvy venture capitalists, and a talented workforce to put it all together as a service or product. Replacing the fog for storms, and exchanging the bay with expansive fields, there rests a burgeoning tech hub in Lincoln Nebraska. Lincoln and the greater Great Plains area have been attracting significant investment and talent from the tech industry in recent years. Specifically, the Omaha-Lincoln Nebraska region has experienced an influx of investment into software-application firms from 2011 onward. The expense and pressure of starting a technology company in Silicon Valley may be pushing innovators and entrepreneurs elsewhere. The pressures and dynamics of the valley aside, local municipalities and economic development coalitions have also fanned the flames of growth in Lincoln. The result has been the proliferation of tech start-ups in the region.

A more robust and accessible internet has made it far easier for entrepreneurs to navigate the obstacles that come with founding a tech start-up. Entrepreneurs and technologist workers alike are considering quality of life measurements and personal preferences more and more when it comes to establishing a new firm or finding a place to work and thrive. This has led regional municipalities to work toward attracting nascent tech firms to their areas. Austin, Des Moines, and Chicago are all in concert with Lincoln in proclaiming themselves a rising tech hub. Although not front and center, economic development consortiums and public-private development co-ops are both stakeholders involved in Lincoln’s success in technology industry growth. With cheaper cost of living already built in, Lincoln simply needed to seize the opportunity present and provide the needed support to finalize tech firm migration into the county.

This development has brought plenty of opportunity for technology jobs. There has been over a 500% increase in the number of jobs within the software publishing industry in Lancaster County , the county in which Lincoln resides, over the past 5 years. Moreover, the average earnings per job is over $100 thousand annually (Source: Emsi 2017.2). Private venture capitalists and publicly sponsored angel investment groups like the Nebraska Angels have nurtured young start-up firms like Hudl, a technology firm that provides video recording and editing software for athletes and coaches, and helped them lay a foundation in Lincoln. Hudl is unique in that it was founded by Nebraska native, David Graff, who worked in the Athletics Department at the University of Nebraska. Hudl was convinced to stay in Lincoln and is building a new $32 million headquarters after having secured $72.5 million in additional investments in 2015. The new facility should add roughly 300 jobs to the area by 2018 and the average total annual compensation for employees at the Hudl headquarters will be roughly $60,000.

This sort of economic development is the result of investors working together with municipalities to finalize a valuable deal. Although appraised at nearly $70 per square foot a few months prior, the land to be developed by Hudl was sold by Lincoln at half the price to ensure their commitment. More recently, near Omaha, Facebook announced they will be building their next data center in Papillion, Nebraska after negotiating a deal with the Omaha Public Power District that will provide Facebook with the power they need while using renewable energy sources, which Facebook prefers. This kind of flexibility by the local government is illustrative of what municipalities can do to attract new jobs and promote development. Both cases required local entities to work toward the greater benefit of the region. Paul and Stephanie Jarrett, founders of Bulu Box, the online health company that ships samples of health supplements, fled their 500-square foot apartment and headquarters in San Francisco to grow their business in Lincoln to take advantage of the cheaper capital and different kind of professional environment. Bulu Box was originally just like the sea of young start-ups that reside in the Bay area. That was until they received seed investment from the Nebraska Angels and the cleverly named Kansas based VC firm, Flyover Capital.

Silicon Valley could be discovering its own capacity for young technology firms and the willing appetites of economic regions abroad are finding ways to take advantage of this overload. Conventionally popular and expensive tech business incubators like San Francisco, Seattle and New York are leaking talent out to the rest of the country. Local investors and economic development practitioners may mirror the steps taken by those in Lincoln, who have provided support that is customized to fit the needs of new businesses. Of course, the most effective way the “Silicon Prairie” and Lincoln can continue to attract technology firms and workers from around the country is to rely on its most distinct advantage; it’s not in Silicon Valley.

2017 has brought a great deal of change to Washington, with a new Administration and Congress. With so many new faces and political developments, it can be hard to keep up. There are a few important developments that you need to pay attention to.

The “skinny budget” proposed by the Trump Administration contains a series of substantial cuts to federal statistical agencies. This budget provides $1.5 billion, an increase of more than $100 million, for the U.S. Census Bureau to continue preparations for the 2020 Decennial Census. This additional funding prioritizes fundamental investments in information technology and field infrastructure, which would allow the bureau to more effectively administer the 2020 Decennial Census. However, the Census Bureau will require significant increases in its budget to prepare for and administer the rapidly approaching Census.

The proposed budget consolidates the mission, policy support, and administrative functions of the Economics and Statistics Administration within the Bureau of Economic Analysis, the U.S. Census Bureau, and the Department of Commerce’s Office of the Secretary. It will also reduce funding for USDA’s statistical capabilities, while maintaining core Departmental analytical functions, such as the funding necessary to complete the Census of Agriculture.

Keep in mind that Congress has the power of the purse and that the drastic cuts proposed by the President are only proposals. A full budget will emerge later in the spring with more details, and this is when the real decisions will be made about the FY 2018 budget. It is increasingly likely that the FY 2017 budget will be a continuing resolution, effectively extending funding at current levels until the end of the fiscal year.

There are also important decisions to be made regarding leadership for the Census Bureau and Bureau of Labor Statistics. Census Bureau Director John Thompson’s five-year term expires at the end of 2017, while Bill Wiatrowski is serving as Acting Commissioner of the BLS following the end of former Commissioner Erica Groshen’s term. It is important that President Trump appoint quality leaders who understand the importance of these agencies.

There are several other legislative priorities to consider with regard to federal statistics. While there is less support for making the American Community Survey voluntary, which would dramatically reduce response rates, there are other concerning developments. The Local Zoning Decisions Protection Act of 2017, introduced by Rep. Paul Gosar (R., Ariz.) and Sen. Mike Lee (R., Utah), could limit data available for Department of Housing and Urban Development geospatial data. There are concerns that the Census could become politicized by the inclusion of questions of immigration status in the survey.

C2ER is working hard to ensure that these valuable data resources are protected and supported in Congress. We will continue to monitor these developments and educate policymakers about the critical importance of federal statistics to C2ER members.

Eliminates the Economic Development Administration, which provides small grants with limited measurable impacts and duplicates other Federal programs, such as Rural Utilities Service grants at the U.S. Department of Agriculture and formula grants to States from the Department of Transportation. By terminating this agency, the Budget saves $221 million from the 2017 annualized CR level.

Eliminates the Minority Business Development Agency, which is duplicative of other Federal, State, local, and private sector efforts that promote minority business entrepreneurship including Small Business Administration District Offices and Small Business Development Centers.

Saves $124 million by discontinuing Federal funding for the Manufacturing Extension Partnership (MEP) program, which subsidizes up to half the cost of State centers, which provide consulting services to small- and medium-size manufacturers. By eliminating Federal funding, MEP centers would transition solely to non-Federal revenue sources, as was originally intended when the program was established.

Reduces duplicative and underperforming USDA programs by eliminating discretionary activities of the Rural Business and Cooperative Service, a savings of $95 million from the 2017 annualized CR level.

Eliminates the Advanced Research Projects Agency-Energy, the Title 17 Innovative Technology Loan Guarantee Program, and the Advanced Technology Vehicle Manufacturing Program because the private sector is better positioned to finance disruptive energy research and development and to commercialize innovative technologies.

Expands DOL Reemployment and Eligibility Assessments, an evidence-based activity that saves an average of $536 per claimant in unemployment insurance benefit costs by reducing improper payments and getting claimants back to work more quickly and at higher wages.

Decreases Federal support for DOL job training and employment service formula grants, shifting more responsibility for funding these services to states, localities, and employers.

Helps states expand apprenticeships, an evidence-based approach to preparing workers for jobs.

Eliminates funding for the Essential Air Service (EAS) program, which was originally conceived of as a temporary program nearly 40 years ago to provide subsidized commercial air service to rural airports. EAS flights are not full and have high subsidy costs per passenger. Several EAS-eligible communities are relatively close to major airports, and communities that have EAS could be served by other existing modes of transportation. This proposal would result in a discretionary savings of $175 million from the 2017 annualized CR level.

Eliminates funding for the unauthorized TIGER discretionary grant program, which awards grants to projects that are generally eligible for funding under existing surface transportation formula programs, saving $499 million from the 2017 annualized CR level. Further, DOT’s Nationally Significant Freight and Highway Projects grant program, authorized by the FAST Act of 2015, supports larger highway and multimodal freight projects with demonstrable national or regional benefits. This grant program is authorized at an annual average of $900 million through 2020.

Eliminates funding for Community Development Financial Institutions (CDFI) Fund grants, a savings of $210 million from the 2017 annualized CR level. The CDFI Fund was created more than 20 years ago to jump-start a now mature industry where private institutions have ready access to the capital needed to extend credit and provide financial services to underserved communities.

Achieves $12 million in cost savings from the 2017 annualized CR level through identifying and eliminating those SBA grant programs where the private sector provides effective mechanisms to foster local business development and investment. Eliminations include PRIME technical assistance grants, Regional Innovation Clusters, and Growth Accelerators.

Statistics Related News

Provides $1.5 billion, an increase of more than $100 million, for the U.S. Census Bureau to continue preparations for the 2020 Decennial Census. This additional funding prioritizes fundamental investments in information technology and field infrastructure, which would allow the bureau to more effectively administer the 2020 Decennial Census.

Consolidates the mission, policy support, and administrative functions of the Economics and Statistics Administration within the Bureau of Economic Analysis, the U.S. Census Bureau, and the Department of Commerce’s Office of the Secretary.

Reduces funding for USDA’s statistical capabilities, while maintaining core Departmental analytical functions, such as the funding necessary to complete the Census of Agriculture.